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Proposed rail line would add freight alternative in Midwest, but has run into local opposition

by Carolyn Orr ~ May 2016 ~ Stateline Midwest »
If the plans of a group of investors called Great Lakes Basin Transportation get the go-ahead, the Midwest could soon be home to the nation’s largest new railroad project in more than a century.
The idea behind this proposed 278-mile rail line is to allow some freight traffic to bypass the Chicago rail yards, where congestion caused by the greatest density of rail lines in the world can tie up freight for 30 hours. Current projections show traffic in this rail hub only growing and congestion worsening in the years ahead.
According to Great Lakes Basin Transportation, between 15 percent and 25 percent of Chicago’s current freight traffic does not originate or end in the city. Its solution: Build a privately owned (and funded) line that runs around the Midwest’s biggest city. The route resembles a giant C as it runs through 11 counties in Indiana, Illinois and Wisconsin (see map ).
But the proposal faces many hurdles, including concerns being raised by some local communities and their state legislators. “This project cuts right through Wisconsin’s Rock Prairie: well-drained soil that is some of the best farmland in the world,” says state Rep. Amy Loudenbeck, who represents a district at the northern edge of the line.
“Our farmers are worried about losing their land and their livelihoods.”
On the eastern edge of the proposed route, Indiana Sen. Ed Charbonneau is hearing from skeptical constituents as well. For example, commissioners in one of his home counties (Porter) unanimously approved a resolution opposing the project, citing concerns about its impact on drainage, property values, public safety and road closures.
According to Charbonneau, some of the affected counties have been investing millions of tax dollars in drainage plans and water quality projects for years. The rail project, he says, would impact wetlands, surface water and rivers.
In the Illinois county of Grundy, officials have said the Great Lakes Basin Railroad would sever 104 farms, with at least 33 of these divisions leaving small remnants that could not be farmed. But the project has its local supporters as well, some of whom have cited the influx of new jobs from production, distribution and warehousing centers.
Proponents, too, say that by easing the rail industry’s dependency on Chicago, grain elevators will be able to move commodities to market more quickly, while farmers will have better access to the fertilizers and chemicals they need.
“The track needs to be built to help the Midwest move forward; it will serve as a building block for manufacturing,” Frank Patton, founder and managing partner of Great Lakes Basin Transportation, said at a hearing on the project earlier this year.
The U.S. Surface Transportation Board is reviewing the project’s March application and has initiated a study of its environmental impact. The entire review process could take up to 36 months. With federal approval, Great Lakes Basin Transportation would then be able to begin land acquisition and construction, perhaps as early as 2018. The project’s estimated cost is $6 billion.

 

 

 

Project raises questions about eminent domain laws — old and new

by Carolyn Orr ~ May 2016 ~ Stateline Midwest »
For now, the fate of Great Lakes Basin Transportation’s plans for a new 278-mile rail line rests with the U.S. Surface Transportation Board. But another step would be land acquisition — at least 7,500 acres of it in parts of Indiana, Illinois and Wisconsin.
The company has said it would pay approximately $20,000 per acre for land and provide free electricity for homes on acquired property; in addition, every property would have local rail access if requested. But there are sure to be holdouts who don’t want to sell their land, and questions have already arisen about state eminent domain laws and how they might apply to this project.
Historically, railroads have had the power of eminent domain: the right to seize private land for public use.
“Without eminent domain, there would be no roads, there would be no highways, there would be no forest preserves, there would be no federally protected natural habitats,” says Frank Patton, founder and managing partner of Great Lakes Basin Transportation. “That’s just the fiber of our government.”
In Indiana, Sen. Ed Charbonneau says, the proposed new rail project may cause lawmakers in his state to revisit decades-old statutory language. For now, though, Indiana law gives railroads “the right to acquire title.”
Great Lakes Basin Transportation has also cited language in Wisconsin and Illinois statutes on “railroad eminent domain rights.”
“GLB should be able to take advantage of ‘quick take’ eminent domain procedures in each of its states to keep recalcitrant landowners from holding the entire project hostage,” the group told local officials in Illinois.
The proposed rail line would be privately owned and funded, and in a 2005 U.S. Supreme Court decision (Kelo v. City of New London), justices agreed that eminent domain could be used to transfer land from one private owner to another to promote economic development.
But backlash against this ruling led states across the country to pass laws that restrict eminent domain for private use. Wisconsin, for example, began prohibiting the transfer of “non-blighted” property from one private entity to another. Indiana legislators, meanwhile, passed a law more clearly defining when eminent domain may or may not be used; they also required that certain condemned property be compensated at 150 percent of fair market value.
Illinois law now prohibits the use of eminent domain to confer a benefit on a particular private entity. It also limits the use of eminent domain for private development unless the area is blighted and the state or local government has entered into a development agreement with a private entity. Because of this law, Dave Helm, senior legal counsel to Illinois House Republicans, disagrees with Great Lakes Basin Transportation’s assertion about the use of quick-take eminent domain for this project. Helm instead believes a legislative change to current Illinois law would be required.

 

Articles written by Carolyn Orr, CSG Midwest staff liaison for the Midwestern Legislative Conference Agriculture & Natural Resources Committee.